Good stability for promising sheep returns
Despite the dry autumn and early winter conditions placing pressure on sheep enterprises, the outlook for sheep commodities remains strong for WA producers.
While many sheep have been trucked east, Westcoast Wool & Livestock has been working hard with producers in an effort to protect the nucleus of the WA flock.
The company has recently been arranging the transfer of breeding stock from the State’s worst-affected northern region to Esperance area graziers, negotiated in good faith between parties to help support producers’ businesses.
Westcoast’s Brad Faithful said with the solid outlook ahead, producers were doing everything they could to hang onto stock, particularly their black taggers.
Brad said a good sign of the positivity was the forward prices for December that were coming into the marketplace for livestock and wool.
“Supply and demand is largely at parity and price stability is very strong, reflected by the fact that the forward opportunities are up with the physical markets,’’ Brad said.
“Farmers have been saying for some time how good it would be to maintain a solid pricing level going forward, and we now have that.’’
The company’s Danny Ryan said increasing demand was being experienced for all livestock, driven especially from Asia.
“Demand from this region for our livestock commodities has been simmering for a while, but it’s now really starting to happen,’’ Danny said.
“Farmers are also to be commended for producing a better product. There are financial benefits from finishing stock properly.’’
The wool market has also been achieving record prices, despite some fluctuations, and recently closed for the winter recess significantly higher than the same time last year, with 19-micron wools up 300 cents plus per kilogram and 21m types up 200c/kg plus.
From last November, buying pressure from Italy helped to push prices higher for 19-micron and finer wools. European consumers appreciate the presence of finer wool fibre in all types of garments, with next-to-skin, soft under garments, stylish knitwear and sportswear all selling well.
China’s strong competition for the improved wool quality last season also continued, with its consumers now adopting more sophisticated clothing. Processing technologies in China have improved considerably and some fashion makers can now compete with Europe.
Brad said increased wool fleece weights and yields last season boosted bale returns for growers, however the drier conditions this year would have some impact.
“We expect fleece weights and yields to be less and the point of mid-break will be a factor. High mid-breaks affect processing performance. As breaking fibres increase, less of best weighted product is obtained. Consequently, discounts apply,’’ he said.
“Price levels may not hold in the early part of the season, but we are not expecting any drastic decrease and they still represent good returns.’’
Meanwhile, the Westcoast business in WA has continued to strengthen, with wool receivals up another 12 per cent year-on-year and further significant growth in sheep and cattle numbers handled by the company.
Brad attributed the recent success to increasing synergy between the company’s wool and livestock operations, providing benefits to producers, as well as its thorough approach with all clients.
“The team delivers the same strong, personalised service and support to smaller through to larger producers and looks at specific plans with them to achieve the best marketing results.’’
“It’s not just a case of some stock going to a boat and the rest to the yards; it’s about advice on the preparation of stock and looking at all options to achieve the best marketing returns,’’ he said.